Tag Archives: Disruptive Innovation

Employed Physicians

This old post is here because I have been thinking a lot lately about the impact of employed physicians on a community’s health. Since this post was written, I have worked for a large hospital-based primary care practice where I was being pressured to produce referrals and tests. When I left, the company waived any non-compete clauses. If they had elected to enforce them, my current community would have been deprived of a family physician in an area of primary care penury. So the lack of independence in primary care may lead to overuse of specialty and technological services and deprive communities of the specific function (primary care) that makes health systems more efficient. This 2008 post contains the seed of an idea to develop a sustainable business model for the independent primary care physician in the interests of the public health. But there are several steps I will have to fill in, so stay tuned. Meanwhile, enjoy…


I had an interesting conversation with a feller from Texas the other day. I was telling him how I had formed my impressions of docs in employed situations from my experience on the East Coast. It just seemed that the solo practitioner was almost dead, if not completely so. Even in rural Maryland, it was more likely to find groups of two or three docs in private practice fiercely holding on to their independence in the face of large single- or multi-specialty groups encroaching from the suburbs. Many of the large groups have found Stark-compliant ways of working with nearby hospitals, or, in some areas, are outright owned by the hospitals.

I reflected to my acquaintance how different it was out here in the Western desert regions, where it seemed the employed docs sometimes felt they could act like it was their own shop and close up with less than a day’s notice to stay home with the kids or go duck hunting or take whatever break is justified by a hard-working, highly-valued provider of a needed service by a grateful community.

You can’t do that when there are 50 physicians and 300 employees whose work schedules are dependent on physicians providing billable services on razor-thin margins.

Well, maybe you can. It’s all about the supply and demand equation, isn’t it? If there aren’t enough primary care physicians to go ’round, the tolerance for behavior inconsistent with a larger organization’s overall well-being is better tolerated. And certainly the local physicians’ culture has an important role to play. Texas docs, I was told were nearly never in large groups and they never tolerated overbearing administrative intrusions to their clinical or vocational independence.

I walked away from my conversation with a tall and lanky Texan (sorry for the cliche, but he was tall and nearly lanky), with an understanding of how different the situation is for physicians across the country and how my approach to change management and performance management is colored by my East Coast experience.

In areas where managed care penetration is high, employed physicians predominate by choice, and a high regard for academic analysis output exists, there is an atmosphere of understanding and willingness to work within a corporate environment. Evidence-based medicine, quality and performance improvement are all perceived as methods to improve health care delivery systems for the betterment of the community. Physicians understand the choice to enter employed positions and accept the trade-offs, giving up some independence for the sake of fewer administrative headaches, better benefits and perhaps, a reasonable lifestyle.

In areas where one or more of these conditions do not hold, physicians resent encroachment on their judgment, style or authority and mistrust the motives of administrators of all stripes. EBM, QI, and PI are bridles of control to be avoided at all costs and administrative entities are regarded to exist for their personal betterment and not the benefit of communities nor the doctors, Such physicians enter into an employed arrangement begrudgingly and only if they feel that their work is not subject to the kind of oversight that will reduce their independence.

OK, I’m dumb. I didn’t realize the obvious until now. I have grown up in academic environments which are so dominated by various stakeholders that the independence of the community physician a distant recollection from the stories of William Carlos Williams; the vague memory of a historical work of fiction read in childhood. The East coast and its large cities are places where independent practitioners are aberrations or mavericks worthy of awe, disbelief and admiration.

Elsewhere in the country, in smaller cities and younger landscapes, the independent practitioner has thrived and the battle for physicians’ independence is much more vigorous.

It is possible to engage physicians any number of ways in future improvements to health care. The lessons of the East tell me that the best way is not confrontational. Without physicians, no meaningful reform is possible, despite the best efforts of other stakeholders. On the East Coast, docs have been beaten into submission. It took a long time, created a lot of ill feelings and did not accomplish much. The rest can do it faster, more collaboratively and with greater focus. The first step is to get a clear understanding of the situation and adapt to local environments.

Disruptive Innovation

This is based on an old post from The Physician Executive when I first started thinking about the place of disruptive innovation in health care delivery.


The problem with disruptive innovation in health care is thinking twice about how it applies.

A couple of precepts before we begin, just so we’re all on the same page, or at least the same library:
1) First the technology can exist for a long time before it is adopted, if at all. It is in the application that an innovation potentially becomes disruptive.
2) Adoption is likely to come from smaller players as new technologies are frequently overlooked by the big players.
3) The innovation is not disruptive to the consumer. It is disruptive to other producers. The consumer adopts it because it is simpler and cheaper than the alternative.

In my world, the innovation will come from changes in the way health care is delivered, not about a sexy new scanner or robotic procedure or even a new iPad app for diabetics. And here, observations about how slowly such innovations are taken up become pertinent.

I would argue against big business. Lately, consolidation has caused health care to be delivered out of monolithic medical systems incorporating primary care, specialty, allied health (physical therapy, audiology, optometry among others) and imaging services. This creates a few problems:

1. Like big government, big business generates an entrenched bureaucracy that is resistant to change, difficult to navigate and primarily interested in perpetuating itself.

2. Incentives are skewed to generate more testing and services. Primary care, when properly delivered, reduces downstream costs to the system, meaning less revenue for the organization.

3. There is less choice (see availability of reproductive services in areas dominated by large Catholic health systems) and the cost advantages of scale initially required to reap the benefits of the technology deployed are rarely manifest.

Carving primary care out of the health care delivery system and providing a special place for it with better revenue, greater legal protection (e.g. tort reform, voiding non-competes) and subsidizing an infrastructure to allow small, personal, relationship-based practices would be a tectonic shift on how we think about health care.  Now that would be disruptive; and just as the iPhone disrupted the PC market, it is only primary care that can disrupt the medical tech (specialty/referral/imaging) sector.

Maybe this is why Clayton Christensen believes health care is ripe for disruptive innovation, although the comments confirm to me that he has not yet found the right disruptions. It will be up to people like Dave Chase, Rob Lamberts and Brian Forrest to figure it out. I could include others, but why take sides?